Perhaps it’s finally dawning on them that a $23 a tonne carbon tax for three years, plus a $15 dollar floor price for the ETS after 2015 is economically and electorally suicidal, especially when the EU carbon price is currently under $10.
Could this be the first of a number of incremental tactical retreats? How far can they go before the Greens have a hissy fit? [Not very - Ed] Greg Combet would be delusional to believe that the carbon price will recover to Labor’s projected figure of $29, surely?
THE Gillard government will abandon the floor price for carbon from 2015 under a deal with the European Union to link the Australian and EU carbon trading schemes.
Climate Change Minister Greg Combet said the move would not prompt a revision of federal budget figures, despite the low carbon price in Europe which has fluctuated between 3-10 Euros in recent times.
The budget figures rely on a $29 carbon price in 2015-16.
Mr Combet said the EU carbon price had been hit hard by the eurozone financial crisis, but it would recover.
“It is three years away,” Mr Combet said. “The treasury modelling is something we stand by.” (source)
Oh, he does. And he is.
All we need to do now is reduce the carbon tax from $23 a tonne down to maybe India’s level – $1.50 [actually 50 rupees, which is about 86 cents - thanks Andrew in the comments - Ed]?
On a serious note, however, if there are a number of small changes such as this, it may make it potentially more difficult for the Coalition to justify repeal if they win power. But while the fixed price remains at $23 a tonne for the best part of three more years, that won’t be a problem.
The government’s announcement is here.